Access Restriction

Author Ghatak, Maitreesh ♦ Jaco, Hanan ♦ Kaboski, Joe ♦ Klonner, Stefan ♦ Townsend, Robert ♦ Udry, Chris ♦ Zingales, Luigi
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Estimated Model ♦ Rural Thailand ♦ Informal Credit ♦ Formal V ♦ Unified View ♦ External Credit ♦ Limited Ability ♦ Rural Credit Market ♦ Observed Diversity ♦ Micro-lending Institution ♦ Transaction Cost ♦ Formal Lending Institution ♦ Trans-action Cost ♦ Sizable Transaction Cost ♦ Important Aspect ♦ Informal Lender ♦ Commercial Bank ♦ Potential Borrower ♦ Limited Enforcement
Abstract This paper tries to understand the mechanism underlying access to credit. We focus on two important aspects of rural credit markets. First, moneylenders and other informal lenders coexist with formal lending institutions such as govern-ment or commercial banks, and more recently, micro-lending institutions. Second, potential borrowers presumably face sizable transaction costs obtaining external credit. We develop and estimate a model based on limited enforcement and trans-action costs that provides a unified view of these facts. Using data from Thailand, the results show that the limited ability of banks to enforce contracts, more than transaction costs, is crucial in understanding the observed diversity of lenders.
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 2010-01-01